Competitions and prizes have become an increasing popular way to spur innovation in finding solutions to the world’s most complicated challenges. Many of the companies doing great work to address energy poverty have benefitted substantially from winning these types of events. Solar Sister was able to take their enterprise to the next level as a result of investments made when they were identified as a leading contender in the Women, Tools, Technology Challenge. Nuru Light earned startup capital when it won the 2010 Tulane Business Plan Competition. E + Co recently received US$350,000 from the Zayed Future Energy Prize. These organizations are touching the lives of the tens of thousands and in some cases hundreds of thousands of people. However, energy poverty is a problem whose scale is measured in billions of people. If we are to make a significant dent in addressing this issue we need solutions that can rapidly scale.

One of the ideas I have been kicking around is an off-grid energy challenge for significantly scalable solutions in developing countries/frontier economies. Energy poverty is a multifaceted problem where issues ranging from technology, access to credit and capital, consumer awareness of solutions, regulatory obstacles, and poverty all interact in ways that prevent people from meeting their energy needs. I am looking for ideas from readers of this blog on how to best frame a competition and what element(s) of this challenge to try and address through the contest.

One possibility is to have a technology oriented competition. Many companies don’t believe that people living in slums or more remote areas have enough money to be worth design solutions for, leading to underinvestment in relevant technologies for them. Current tech competitions tend to focus on high end engineering regardless of price such as the Automotive X Prize which sought cars that could get 100 mpg, an important goal but not focused on the needs of those in poorer countries. Would a technology oriented competition that sought prototypes for village or household level energy solutions that produce the most electricity at the lowest cost be the contest that would have the biggest impact? Perhaps you think the biggest problem isn’t the lack of technical solutions but the lack of consumer education about existing technologies and good business models for distributing those items. If that’s the case then a business plan competition focused on energy for places unlikely to be connected to a central grid anytime soon might be the best use of resources. Or maybe you think the issue is something else entirely.

Please send me your ideas for the competition. Use the comments section for this post so we can turn it into a discussion. Which parts of the challenge of energy poverty should this competition focus on? What criteria should be used to evaluate entries? What should the prizes be? I am hoping to shop this concept around to my contacts at foundations and private sector companies as well as multilateral and bilateral aid agencies once it is more developed. I look forward to using this community’s energy to generate great ideas!

At Ideas on Energy we love grappling with the most challenging questions about our shared energy future. Over the past four months a number of excellent publications have come out regarding big picture energy security trends and geopolitics. Falling under the “I read it so you don’t have to,” category of posts I am going to summarize some of the more interesting papers that have recently been released, although all of these papers are worth spending some time with.

Earlier this week Shell published the excellent “Shell Energy Scenarios to 2050: Signals and Signposts”. This is a fascinating document in that it maps out future energy scenarios based not just on the usual supply and demand forecasts but also looks at broad geopolitical trends and actively advocates for countries to expand coordination of policies that will significantly reduce greenhouse gas production. The forecasts for demand are based on relatively uncontroversial assumptions that global population growth will continue for the next 40 years and that emerging economies (read India and China) are entering the most energy intensive phase of their development. Global energy demand will triple between 2000 and 2050 but increases in production and efficiency and not likely to keep pace. This document looks at how will the world deal with both the significant gap between supply and demand as well as the environmental stresses created by increased energy demand.

Shell sees two possible categories of scenarios to deal with these challenges. The first is “scramble” whereby each country tries independently to secure as much supply for itself as possible. Demand management and environmental concerns are shunted to the side as long as possible although eventually economic growth is constrained by access and environmental challenges which finally forces countries to take action. The other possibility is “blueprint” whereby coalitions of countries, NGO, and citizens recognize that they have a collective interest in a proactive approach to energy and environmental management. Private sector entities under this scenario at the same time realize that regulatory certainty will enable commercial investment and profit.

The paper then looks at which of these directions is more likely for the future based on the global economic reconfiguration of 2008 which Shell boldly proclaims has shifted political power from West to East, increased the involvement of states in both domestic and global economics, and decreased the trust between the governed and politicians in democracies making regulation more difficult. Although it does not clearly state whether the authors think the world is heading more in a “scramble” direction or a “blueprint” direction, they do note that “global inaction, might lead people to shrug off the climate issue. Many are quick to doubt the science. Amid such ambiguity a discontinuity is building as expert and public opinion diverge. This divergence is not sustainable!”

The Center for Strategic and International Studies also looks at the drivers of energy geopolitics reaching out to 2035 in their publication “The Geopolitics of Energy”. The authors point to the political centrality of energy in the developing world since economic growth is as important a justification for political power in authoritarian China as it is in democratic India. They note that for those looking at new sources of energy such as natural gas to be primary drivers towards a lower carbon energy future, we still face a geographic concentration in a few countries that many do not want to politically empower. Although gas allows for a diversification of supply in the U.S. and Canada, extraction from unconventional sources in the Western hemisphere is a high carbon process. Low carbon extraction is possible mainly in Iran, Qatar, and Russia. Also, most renewable sources of energy require rare earth elements which would create supply bottleneck risk from countries like China or Bolivia. The paper concludes that “single issue advocacy, unbridled optimism, and blind reliance of technological innovation are woefully inadequate though they frequently masquerade as policy prescriptions.”

In the Chatham House publication “More for Asia: Rebalancing World Oil and Gas”, author John Mitchell focuses on the impact that a reorientation of oil and gas supply chains towards Asia will have. Increasingly, state owned buyers in Asia will purchase supplies from state owned suppliers in the Middle East. He sees this as decreasing the role of the private sector in both investment and trade globally. Additionally, this will make the Middle East less reliable as a supplier to Europe and will increase European reliance on Russia for supply at a time when the EU is trying to decrease that dependence.

“Pipeline Politics in Asia”, released as an edited volume after a conference conducted by the National Bureau of Asian Research, focuses on the implication of projections out to 2030 that China and India combined will account for 50% of global energy demand growth, 60% of oil demand growth, 20% of gas demand growth, and 85% of coal demand growth. We are reminded of Winston Churchill’s speech to the British House of Commons in 1913 where he states, “On no one quality, on no one process, on no one country, on no one field must we be dependent. Safety and certainty in oil lie in variety and variety alone.” Energy security relies on diversity but diversity is expensive, which raises a fundamental question: who benefits and who pays? This lays the groundwork for even more state involvement in creating supply networks when market forces alone are not enough to guarantee needed energy security.

One of the more interesting questions raised in this collection is the degree to which the search for secure energy supplies is and should be seen as a competition. The different authors of each chapter offer different perspectives on this question. The U.S. is trying desperately to direct gas pipelines away from Iran, even though an Iranian route makes the most sense from a purely economic perspective. Some in the U.S. are concerned that Chinese attempts to secure supply from Central Asia may undermine the potential supply scale needed for U.S. favored, Western directed pipeline projects. China clearly does see the U.S. as a threat to its energy supplies, especially given the fact that approximately 80% percent of China’s imported oil flows through the straits of Malacca, an area where the U.S. currently enjoys naval superiority. On the other hand, secure supplies of energy for China are good for the stability of global energy markets overall. As one author notes “It would be short-sighted for Western governments and companies to see Chinese pipelines out of Central Asia as a threat rather than a possible opportunity. If China is willing to pay a premium for diversity of supply from Central Asia, it enhances rather than harms global energy security.”

Reading through all of these papers, I am struck by the consist trends which all of them note regarding the significance of increased demand from Asia, the need to diversify supply to ensure security, and the challenges of collective action. What is less clear is how we can address these collective action problems given the global political trends we face. What do you think is the best way to turn what many view as a competition for resources and influence into an opportunity for us to cooperate towards our shared goals of economic prosperity and environmental balance?

Global energy innovation is not a zero sum game. A technology that improves the efficiency of solar panels can be deployed anywhere regardless of who holds the patent and a country that can produce cheaper wind turbines means that more wind power can be installed globally for the same amount of money. Despite the fact that everyone can benefit from global innovation, the spoils are clearly not divided evenly and there are winners and losers at the local level. No country inspires more fear right now regarding who will reap most of the benefits of new developments in clean technology than China, which is clearly playing by some different rules than other countries. Almost every day there is a new report in the U.S. press about how China is unfairly stealing intellectual property (IP) from other countries and using the appropriated technology to compete against the same international companies that gave them these ideas. According to a recent Wall Street Journal article, appropriating foreign IP may actually be part of a coordinated state policy. So how should we think about China’s role in the development of clean energy?

James Fallow presents a fascinating model in the Atlantic Monthly about how the U.S. and China have formed a mutually beneficial relationship regarding innovation in the energy sector. Fallow focuses on “clean coal”, which he argues needs to be a focus of anyone serious about arresting climate change given the facts that the U.S. and China are both the largest emitters of greenhouse gases and the largest consumers of coal. His basic argument is that although a lot of the best innovations are still coming from the U.S., America simply isn’t constructing that many new power plants compared to China. American innovators benefit by having someone actually apply their ideas in a real world context on a meaningful scale and China is the perfect place to do that given the rapid rate at which they are building new sources of power of every kind. The Chinese turn American experiments into real world applications, refine the idea, and the U.S. learns the ins and outs of the new ideas it has developed more rapidly than it would otherwise. Everybody wins.

What makes people more nervous is when China comes up with the big ideas themselves. It was recently announced at a Chinese Academy of Sciences meeting that their government is undertaking a program to build the world’s first thorium-fueled molten-salt nuclear reactors, which many refer to as “clean nuclear” power. Although much of the initial research on generating energy from thorium was conducted at Oak Ridge National Laboratory in Tennessee during the 60s and 70s, the work was largely abandoned in favor of pursuing research on nuclear energy based on uranium. If the Chinese are the first to create working power plants from this technology America could find itself importing much of the technology for clean nuclear in the future from China and paying Chinese companies to use their patents.

Regardless of the degree to which policy makers see China as a competitor or an opportunity, the best response is clear. Continuing to push the envelope of innovation will benefit both individual countries and global energy consumers overall. As one Japanese executive is quoted in the Financial Times as saying, “When we install a new process in China we know that some technical details will inevitably leak out to rivals. So we always have to make sure that when we introduce the latest generation of technology in an overseas plant we are working away on the next generation in our research laboratories in Japan.” Whatever else is done to protect countries’ and companies’ intellectual property, the only way to stay ahead of the game is for everyone to do all they can to continue coming up with new ideas and technologies.

Competitions with cash prizes are increasingly being seen by philanthropies, businesses, and governments as a way to spur innovation towards social goals. This trend is moving out of the U.S. and Europe to other parts of the world. Today the Zayed Future Energy Prize, based in Abu Dhabi, has announced the top six finalists to compete for the 2011 Prize. It might seem strange that an oil rich state in the Gulf is focused on promoting alternative energy but Abu Dhabi has been particularly forward looking in thinking about the future of energy. Abu Dhabi is home to Masdar City, a $22 billion planned community that is aiming to be carbon neutral and serve as a hub for renewable energy and clean technology companies.

According to the organization’s website, “This annual award celebrates achievements that reflect innovation, long-term vision and leadership in renewable energy and sustainability.” The winner will receive $1.5 million and two runner ups will get $350,000. The finalists are:

Amory B. Lovins, the Chairman and Chief Scientist of the Rocky Mountain Institute in Colorado, for his work on “integrative design” for energy efficient buildings. Lovins describes “integrative design” as a powerful and globally applicable new tool for shifting rapidly from oil and coal to efficiency and renewables.

Barefoot College, the only fully solar electrified College in India, for training woman in rural areas to contribute to solar energy development. The college believes the very poor have every right to have access to, control, and manage and own the most sophisticated of technologies to improve their own lives.

E+Co, an investment company based in New Jersey, for its pioneering clean energy investments in the developing world. E+Co supports and invests in small and growing clean energy enterprises in developing countries that impact climate change and energy poverty.

First Solar, solar modules manufacturer based in Arizona, for its commitment to solar energy and the development of more efficient thin film solar modules. First Solar has developed an innovative photovoltaic technology focused on affordability as well as sustainability and is the preferred module supplier for major PV projects globally.

Terry Tamminen, CEO and Founder of 7th Generation Advisors, for his work in developing renewable energy solutions in California. For more than 20 years, Tamminen has developed, implemented and replicated effective renewable and sustainable energy solutions by using California as a proof-of-concept model, then scaling up to larger markets within the US and internationally.

Vestas, a Danish manufacturer of wind turbine technology for its work to bring clean energy to developing countries. For over 30 years, Vestas has been introducing innovative ideas to promote clean, renewable wind power as one of the world’s mainstream power solutions. They are relentlessly committed to establishing wind as a large-scale, sustainable alternative to oil and gas.

Imagine H2O is running a great competition for startups that will reduce the amount of energy needed to move and treat water and waste water. Dealing with energy and water issues in an interconnected way is vital to solving problems in both areas. During congressional testimony last year on the nexus of energy and water it was noted that “nationwide, water and wastewater treatment and distribution combined require about 3% of the nation’s electricity. In California, where water is moved hundreds of miles across two mountain ranges, water is responsible for approximately 15% of the state’s total electricity consumption.” Conversely, because of the water required for the production of electricity, “Most Americans do not realize that they use more water turning on lights and running appliances each day than they do directly through washing their clothes and watering their lawns.”

Winners of the prize will receive $100,000 in cash, business and legal support, and access to a network of partners, customers and financiers to help bring their ideas to market. The organization recently announced the finalists for the 2010 prize. They are as follows: